Financial Risk Manager Part 1

Explanation

Correct Answer: C

Unsupervised learning involves training a model to discover data patterns without explicit guidance, while supervised learning involves training a model to make predictions or classify data using labeled examples.

Why other options are incorrect:

A is incorrect: This reverses the definitions. Unsupervised learning actually involves training on unlabeled data, while supervised learning uses labeled data.

B is incorrect: Unsupervised learning recognizes data patterns without an explicit/predefined target, not necessarily to "classify" - that's typically a supervised task. Unsupervised learning may involve clustering or dimensionality reduction.

D is incorrect: This describes reinforcement learning (maximizing reward signal) versus supervised learning (minimizing loss function), not the distinction between unsupervised and supervised learning.

Key Differences:

• Supervised Learning: Uses labeled training data with known outcomes to make predictions
• Unsupervised Learning: Discovers hidden patterns and structures in unlabeled data without predefined targets